Docket: T-1380-13
Citation:
2016 FC 347
Montréal, Quebec, March 24, 2016
PRESENT: The
Honourable Madam Justice St-Louis
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BETWEEN:
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WENGER S.A.,
GROUP III INTERNATIONAL LTD., AND HOLIDAY GROUP INC.
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Applicants
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and
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TRAVELWAY GROUP
INTERNATIONAL INC.
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Respondent
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JUDGMENT AND REASONS
[1]
The applicants, Wenger S.A. [Wenger], Group III International
Ltd. [Group III], and Holiday Group Inc. [Holiday] filed an application before
this Court seeking (1) a declaration that the respondent, Travelway Group
International Inc. [Travelway] has infringed the Wenger Trade-marks [Wenger
Marks], (2) a permanent injunction restraining Travelway from infringing the
Wenger Marks, (3) an order expunging registration numbers TMA740206 and
TMA740200 from the trade-marks register, (4) an order requiring Travelway to
destroy or to deliver to the applicants all products marked with any mark
similar to the Wenger Marks, in its possession, power or control, (5) an order
for the payment of damages and for aggravated, punitive and exemplary damages,
and (6) costs on the highest scale.
[2]
As per their submissions, the applicants seek
the aid of the Court and the shelter of the Trade-marks Act, RSC 1985, c
T-13 [the Act] to protect the Wenger Cross Logo, hereinafter described, and brand
against what it considers Travelway’s infringing, deceptive and unfair actions.
In essence, they submit that since 2008, and particularly since 2012, Travelway
has engaged in a deliberate and planned scheme to unfairly hijack the
reputation of Wenger’s Cross Logo, and claim it for itself.
[3]
Travelway contends on the contrary that its
trade-marks have been registered since 2009, and that the applicants had not
objected to their use for at least two years after they first appeared. It
submits, in essence, that it is legitimately using its trade-marks under the
shield of the registrations it obtained, and that the applicants have not met
their burden to show that a likelihood of confusion exists.
[4]
For the reasons set out below, this application
will be dismissed.
A.
The parties
[5]
Holiday is Canada’s largest luggage and soft bag
supplier, employing over 150 people and selling its wares across Canada in over
4,000 points of sale. Group International has been in the business of designing,
manufacturing and distributing luggage and bags for nearly thirty years, and is
the master global licensee of the Wenger Marks in relation to luggage and bags.
[6]
Wenger is a Swiss company who, over 100 years
ago, received a contract from the Swiss army to produce multi-function knives
for its soldiers. Those knives became famous and known as the “Swiss Army Knives”,
and particularly, as the “Genuine Swiss Army Knife”.
[7]
At least as early as the 1970s, Wenger adopted a
logo comprised of a cross in a rounded quadrilateral and surrounded by an
inlaid border [the Wenger Cross Logo]. The Wenger Cross Logo is typically
presented featuring a white or metallic cross and border, set against a black
or red background.
[8]
Wenger owns a number of trade-marks in Canada of
which three are registered in association with luggage and various kinds of
bags and feature the Wenger Cross Logo [the Wenger Cross Luggage Marks]. These
three marks are the ones at issue in these proceedings and they are the
following.
[9]
It is undisputed that the applicants have
continuously used the Wenger Cross Luggage Marks throughout Canada, on and in
association with luggage and bags, since 2003. They were registered at different dates from
2007 to 2012.
[10]
In addition, Wenger also owns and uses various
unregistered marks in Canada, including the word marks “SWISSGEAR” and “From
the maker of the Genuine Swiss Army Knife”.
(2)
The respondent
[11]
Travelway was founded in the late 1970s. It mainly manufactures and distributes luggage and
travel-related products, both under its own labels and as a licensee for others.
[12]
In 2008, Travelway became involved in what it
described as a strategic alliance with the Swiss company World Connect AG
[World Connect] whereby it agreed to assist World Connect in designing products
for its “Swiss Travel Products” brand, which is a registered trade-mark in
Canada under the name of World Connect. It developed two new logos: the first, known
as the “S in Cross”, and the second, known as the “S in Cross on Triangle”.
[13]
The “S in Cross” features a rounded square, in
the center of a cross, and an “S” in that round square. It has no contour.
[14]
The “S in Cross on Triangle” represents the “S
in Cross” featured in white against a greyscale-background with a surrounding
darker border, in the form of a rounded triangle.
[15]
Travelway has used these logos since 2009. In
December 2008, its trade-mark applications were published in the Trade-marks
Journal, and in April and May 2009, they were registered (TMA 740206 and TMA
740200). These trade-marks were not challenged.
B.
Relevant facts
[16]
In February 2012, Travelway allegedly modified the
logos appearing on its luggage and bags. Most notably, the prominent “S”
feature was altered making the “S” difficult to see, this being referred to as
the “Disappearing S” logo, or it was eliminated, this being referred to as the
“Missing S” logo.
[17]
The applicants had not challenged Travelway’s
trade-mark registrations, but this change in Travelway’s logos prompted them to
seek the protection of the Court.
[18]
As per the representations of the parties, this
matter raises the following issues:
1.
Is Holiday a proper party in this case?
2.
Is there a likelihood of confusion among
consumers between Travelway’s and Wenger’s luggage wares such that Travelway
has infringed the Wenger Cross Luggage Marks, in contravention to section 20 of
the Act?
3.
Has Travelway passed off its wares as and for
those of the applicants, in contravention to section 7 of the Act?
4.
Are the two Travelway registered trade-marks
valid and enforceable?
5.
What are the proper reliefs?
[19]
The applicants submit that (1) Holiday is a
valid party to these proceedings, (2) Travelway infringes the Wenger Cross
Luggage Marks through its use of confusing marks, contrary to section 20 of the
Act, (3) Travelway has passed off its wares as and for the applicants’,
contrary to section 7(c) of the Act, and (4) the registration of Travelway’s
marks is invalid, pursuant to section 18 of the Act.
[20]
The applicants believe the appropriate reliefs
to be a permanent injunction restraining Travelway from using its registered
and non-registered trade-marks, a declaration of invalidity of the registered
trade-marks, the expungement of the registered trade-marks, and damages.
[21]
In support of their Application, the applicants tendered
the affidavits of Mr. Raymond Durocher, president of Holiday, Dr. Ruth Corbin
of CorbinPartners Inc., and Ms. Keri Blackburn, and the exhibits thereto.
(1)
Holiday is a proper party to these proceedings
[22]
The applicants assert that Holiday is an “interested person” as per section 53.2 of the Act
(reproduced in Annex), as the definition set out in section 2 of the Act is not
limited to the holders or the owners of a trade-mark, but quite the contrary,
is intentionally broader, and includes Holiday as it may be affected or
reasonably apprehend that it will be. The applicants rely on Mr. Durocher’s
affidavit, on clause 3 of the distribution contract, and on the fact that
Holiday pays for the Wenger Marks, that it invested, and holds significant
interest as Wenger’s eyes and ears in Canada. In essence, the applicants submit
the distributor, Holiday, shares in the reputation and goodwill, has an
interest, is involved, and meets the test set forth in the relevant case law,
namely Natural Waters of Viti v CEO International Holdings Inc, 190 FTR
300 at para 19 [Natural Waters] and Osiris Inc v International Edge
Inc, 2009 OJ no 3916 at para 28 [Osiris]. The applicants distinguish
this case law as being one in which the party consisted of sales agents, and
were not involved whereas Holiday is not merely a sales agent, and is involved.
[23]
Wenger submits that Travelway infringes its
trade-marks as both its registered and non-registered marks bear a high degree
of resemblance to Wenger’s Cross Luggage Marks using the Cross Logo, and that the
test for confusion is thus satisfied.
[24]
The applicants submit that the test for
confusion under the Act is settled. Whether a trade-mark is confusing with
another is a matter of “first impression in the mind of
a casual consumer somewhat in a hurry who sees the mark at a time when he or
she has no more than an imperfect recollection of the prior trade-marks, and
does not pause to give the matter any detailed consideration or scrutiny, nor
to examine closely the similarities and differences between the marks”.
It is not necessary that actual confusion be proven; a likelihood of confusion
is enough (Veuve Clicquot Ponsardin v Boutique Cliquot Ltee, [2006] 1
SCR 824 [Veuve Clicquot] at para 20).
[25]
Subsection 6(5) of the Act (reproduced in Annex)
enumerates the factors that must be considered in a confusion analysis between
one trade-mark and another. The analysis usually begins with an assessment of
the degree of resemblance. If the trade-marks do not resemble each other, it is
unlikely that the other factors would lead to a finding of likelihood or
confusion. The other factors become significant once the threshold of similarity
has been established (Masterpiece Inc v Alavida Lifestyles Inc, [2011] 2
SCR 387 [Masterpiece] at para 49).
(b)
Application of the test
[26]
The applicants submit that Travelway’s marks do confuse
the “casual consumer somewhat in a hurry” by (i)
the degree of resemblance between Travelway’s and Wenger’s trade-marks, (ii)
the inherent distinctiveness of Wenger’s trade-marks and the extent to which
they have become known, (iii) the length of time the trade-marks have been
known, (iv) the nature of the wares, and (v) the nature of the trade.
[27]
Resemblance is defined as the quality of being
either like or similar. The term “degree of
resemblance” under section 6(5) of the Act implies that likelihood of
confusion does not arise exclusively from identical trade-marks. Rather, it
recognizes that marks with some differences may still result in likely
confusion (Masterpiece, at para 62).
[28]
The applicants submit that the Court must
perform a resemblance analysis for each of the marks. The dominant feature of
each of Wenger Cross Luggage Marks at issue is the Cross Logo, which is common
to all the marks. Thus, the analysis need only be performed by reference to the
Cross Logo.
[29]
The applicants submit that all of the Travelway trade-marks
bear a high degree of resemblance to each of the Wenger Cross Luggage Marks
using the Cross Logo. The degree of resemblance is progressively more intense,
from the “S in Cross” mark to the “Missing S” one used on Travelway’s zipper
pulls.
[30]
The applicants submit that Travelway’s “S in
Cross” mark closely resembles, in the mind of a consumer, Wenger’s Cross Logo.
In each one, the cross, which is of similar style and proportion, is the
dominant feature.
[31]
Travelway’s “S in Cross on Triangle” mark
resembles even more closely the Cross Logo, since it features the same cross
shape as the “S in Cross” mark, and since the cross is set on a round edged,
shield-type background with a border, just like Wenger’s Cross Logo.
[32]
The “Disappearing S” has been used on luggage
and bags since 2012. Its cross is narrower and longer than the one used in the
registered marks, and its shape closer to that of the Wenger Cross Logo although
the shape of the triangle background is less pronounced, the border is metallic
and identical in tone to the cross and the S is difficult or impossible to see.
[33]
As for the “Missing S” logo, it has been used on
zipper pulls of luggage and bags since 2012 as well. The applicants contend
that it is effectively identical to Wenger’s Cross Logo. Both feature a cross
with no other distinguishing features against a background plate with rounded
corners and a contrasting colour.
[34]
Inherent distinctiveness under paragraph 6(5)(a)
of the Act is concerned both with the inherent distinctiveness of the mark, and
its acquired distinctiveness. Marks are inherently distinctive when nothing
about them refers the consumer to a multitude of sources. Where a mark does not
have inherent distinctiveness, it may still acquire distinctiveness through
continual use in the marketplace. To establish this acquired distinctiveness,
it must be shown that the mark has become known to consumers as originating
from one particular source (Pink Panther Beauty Corp v United Artists Corp,
[1998] FCJ No 441 at paras 23-24).
[35]
The applicants submit that the Wenger Cross
Luggage Marks have acquired distinctiveness through continuous use in the
luggage and bag market in Canada since 2003. Holiday has sold over five million
units of Wenger luggage wares since 2003, and the Cross Logo has become well
known and recognized across Canada. Holiday makes substantial investments every
year in the marketing and promotion of its Wenger luggage wares, and Wenger Cross
Luggage Marks are thus known to consumers as a unique identifier of luggage and
bags emanating from Wenger and continuing the Swiss Army Knife tradition.
[36]
According to the applicants, the Travelway marks
are not distinct, but very similar or nearly identical to the Cross Logo and do
not distinguish the Travelway from the Wenger luggage wares.
[37]
The applicants submit that the Cross Logo was
first used by Wenger in the 1970s and was first introduced in Canada on luggage
and bags in 2003. In the years before Travelway luggage wares entered the
Canadian market, Holiday sold countless Wenger luggage wares bearing the Cross
Logo.
[38]
The applicants submit that the registration
particulars show that the parties use their respective logos in association
with identical products namely, luggage, backpacks, briefcases, computer cases,
luggage tags, umbrellas and other similar wares. Because of Travelway’s
infringement of Wenger’s trade-marks, it is not just the general categories of
wares that are identical; the products themselves are nearly identical in the
mind of an ordinary consumer. According to the applicants, the Travelway
luggage wares replicate the functionality and design features of many Wenger
luggage wares.
[39]
The applicants submit that Holiday and Travelway
are engaged in identical trade using the same distribution channels for their
luggage products and have the same consumer purchase points, both retail and
internet. The Wenger and the Travelway luggage wares are found in the same
retail stores (for example, Costco and Bentley); they appear side-by-side in
store displays, and they turn up on the same internet search and e-commerce pages.
(c)
Evidence of actual confusion
[40]
The applicants have presented evidence of
confusion in the form of affidavits by Mr. Raymond Durocher, president of
Holiday, and Dr. Ruth Corbin, who have both been-cross examined. Mr. Durocher
testified namely to report three (3) instances where there was evidence of
actual confusion in the marketplace between the Travelway and the Wenger
luggage wares, namely mistakes in two Canadian Tire flyers, in June 2012 and in
January 2014, and in one Walmart flyer in August 2013.
[41]
Dr. Corbin testified in relation to the mystery
shopping study conducted by the CorbinPartners firm to assess the likelihood
that luggage salespeople would confuse the Wenger luggage wares with the Travelway
ones. Dr. Corbin’s study found that 51% of luggage salespeople did confuse
Travelway and Wenger luggage wares, and that the flyers are a potential source
of “transmitted confusion” as they risk confusing as many consumers as they
reach.
[42]
In her affidavit, Dr. Corbin asserts that the
study demonstrates a relatively high likelihood that salespeople will confuse
the two brands, based on the branding indicia of Swiss Travel Products. She
considers that evidence noteworthy because (1) luggage salespeople have specialized
knowledge and one would anticipate a lower level of confusion among them as
compared to ordinary customers, and (2) salespeople’s confusion has the
potential to be transmitted to hundreds of consumers each day.
[43]
The applicants remind the Court that, although
useful, the expert evidence or survey is not necessary and that it falls upon
the Court to evaluate the likelihood of confusion, i.e. if the “casual consumer somewhat in a hurry” who sees the
Travelway luggage wares would likely think that they are from the same source
as the Wenger ones.
[44]
However, they assert there is not only evidence
of likelihood of confusion, but also of multiple instances of actual confusion.
In Canada Post Corp v Paxton Developments Inc (2000), 198 FTR 72, this
Court relied on survey information indicating that 9% of those surveyed were
confused as sufficient evidence of actual confusion by a significant number of
consumers.
[45]
They contend that Wenger has the right to exclusive
use of the Wenger Cross Luggage Marks under sections 19 and 20 of the Act (both
reproduced in Annex), and Travelway has infringed that right through its use of
confusing marks.
[46]
The applicants state that it is well recognized
in trade-mark law that “nobody has the right to
represent his goods as the goods of somebody else” (AG Spalding
Brothers v AW Gamage Ltd (1915), [1914-15] All ER Rep 147 at 149 (HL)). The
common law and section 7 of the Act (reproduced in Annex) prohibit any person
from passing off its wares as and for those of another.
[47]
The applicants contend having established the necessary
three elements to make out a case of passing off: (i) the goodwill or
reputation attached to the applicants’ goods in the mind of the purchasing
public; (ii) Travelway has made a representation to the public, and (iii) the
applicants suffered or are likely to suffer damage as a result of the Travelway’s
misrepresentation (Ciba-Geigy Ltd v Apotex Inc, [1992] 3 S.C.R. 120 [Ciba-Geigy]
at para 33).
[48]
The applicants rely on Dr. Corbin’s affidavit to
establish that their marks and wares have substantial goodwill and reputation
in the mind of the purchasing public. Dr. Corbin explains that famous or
well-known brands have acquired an embedded trust, a cachet, that allows their
owners to add a price premium and to generate a higher level of sales from a
given marketing investment than lesser known brands would generate.
[49]
The Wenger Cross Luggage Marks have been used on
luggage and bags since 2003 and are readily identifiable. They have goodwill in
their own right, amplified through the association of the Cross Logo with the
legacy of Wenger’s Swiss Army Knives.
[50]
The applicants submit they need not show any
intentional misconduct or deliberate deceitful acts by Travelway. The mere
adoption and use by Travelway of a mark or name that is likely to be confused
with Wenger’s is sufficient (Molson Canada v Oland Breweries Ltd, [2001] OJ
no 431 at paras 20-24). However, Travelway’s false claims of “Swissness”, the “Disappearing
S” logo on its bags and the “Missing S” logo on its zipper pulls are all
intentional efforts to deceive the public. By deliberately making “Swiss”
claims about its products and using logos that are similar to the Wenger Cross
Luggage Marks, Travelway is misrepresenting its wares, and has done so in full
knowledge of the Wenger Marks as used on the same kind of wares.
[51]
The applicants must show that, as a result of
the misrepresentation, they have suffered or are likely to suffer damage. Where
the defendant is in direct competition with the plaintiff, damage can be
established by showing a likely loss of sales to a competitor. This criterion
can also be satisfied where the misrepresentation results in a plaintiff’s loss
of control over the use of its name or mark or in an obstacle to a plaintiff’s
use of its own name or mark (Orkin Exterminating Co Inc v Pestco Co of
Canada, [1985] OJ no 2536 at para 37). The applicants believe both forms of
damage are established in this case.
[52]
The applicants believe that damage to goodwill
and position in the market, through direct loss of sales, can be inferred from
evidence that the infringer is a direct competitor in the same markets and uses
the same distribution channels. Confusion on the part of retailers and
salespersons, transmitted confusion to customers, and a customer’s own
confusion will likely lead to purchases of Travelway luggage wares instead of
the Wenger luggage wares. Damage will likely also arise from harm to the goodwill
of the Wenger Cross Luggage Marks, and in this regard, Dr. Corbin confirmed and
explained that loss of trust in a brand and image is a matter of perception,
and can be permanent.
[53]
Hence, Travelway’s intentionally varied uses of its
marks that omit or obscure the “S” and its use of those marks in association
with false claims of Swissness are a deliberate effort to affect the applicants’
control over the Wenger Cross Luggage Marks. One particularly notable aspect of
Travelway’s conduct is its persistent use of zipper pulls with no “S” in the
cross logo, which are a direct infringement of the Wenger Cross Luggage Marks.
The fact that elsewhere on the product there might be a version of the
Travelway registered marks does not absolve the use of another directly
infringing mark on the same product.
[54]
In view of all the above evidence, the applicants
believe that Travelway has passed off its wares as theirs, in an effort to
obtain financial gain to the applicants’ considerable detriment.
[55]
The applicants submit that the registration of
Travelway’s Cross marks are invalid under subsection 18(1) of the Act (reproduced
in Annex) because they are confusing, and not distinctive of Travelway’s wares.
Travelway was thus not entitled under subsection 16(1) of the Act (reproduced
in Annex) to secure their registration. As a result, the registration cannot
act as a defence to Travelway’s infringement and passing off. The applicants
submit that the registrations of the Travelway Cross marks can be declared
invalid on the basis that Travelway has abused the rights of registration. It
obtained the rights of registration on representation that it would use the “S
in Cross” and the “S in Cross on Triangle” marks, but used distortions of their
marks and in doing so, infringed the Wenger Cross Luggage Marks.
[56]
The applicants seek (a) a permanent injunction
against Travelway, (b) a declaration of invalidity and expungement and (c)
damages.
[57]
The applicants seek a permanent injunction
against Travelway restraining it from using, directly, indirectly or via
licence, the Travelway Cross marks and their common law equivalent, pursuant to
sections 10, 11 and 53.2 of the Act (all reproduced in Annex).
[58]
The applicants seek a declaration of invalidity
and an order that registration numbers TMA740206 and TMA740200 be struck from
the Trade-marks register pursuant to subsection 57(1) of the Act (reproduced in
Annex), since the registrations are invalid.
[59]
The applicants submit that section 53.2 of the
Act allows a successful plaintiff to seek damages or an accounting of profits
as remedies for trade-mark infringement. Compensation for trade-mark
infringement is based on two principles: (1) restoration of the affected party
into the same position it would have been but for the infringement and (2)
compensation by way of price or hire for the use made of the affected party’s
property (Electric Chain Co of Canada Ltd v Art Metal Works Inc et al,
[1933] S.C.R. 581 at 590).
[60]
The applicants ask that if the Court finds
Travelway liable for infringement, it directs a reference, under Rule 153 of
the Federal Courts Rules, SOR/98-106 [the Rules], to assess the applicants’
damages, Travelway’s profits and the compensation due to the applicants.
[61]
The applicants also seek punitive damages, but
want this question to be made an issue for the referee. The applicants believe
that punitive damages are appropriate in this case because Travelway’s conduct
was part of a scheme to confuse consumers, to create mischief in the marketplace
and to divert actual revenue, sales and goodwill to Travelway.
[62]
Travelway submits that (1) Holiday is not a
proper party to the proceedings, (2) the Travelway marks are valid and used, (3)
no evidence of actual, likely or self-evident confusion exists, (4) there is no
infringement, (5) there is no passing off and (6) there is no evidence of
damage.
[63]
Travelway requests that the Court declare their
marks valid and enforceable and dismiss the applicants’ application.
[64]
In support of its arguments, Travelway tendered affidavits
and exhibits from Mr. Bruce Shadeed, president of Travelway, and from Mr.
Christian Bourque, an expert in the field of surveys.
[65]
Travelway submits that section 53.2 of the Act
mentions that “any interested person” can file an application for the court to
grant relief for any act done contrary to the Act, but in order to obtain a
relief, an “interested person” must necessarily have an interest in the
trade-mark or the indicia sought to be protected through the action for
infringement or passing off (Osiris Inc v International Edge Inc, 2009
CanLII 50224 (ON SC) at paras 21-29). Group III is a licensee of Wenger, but
has no right to sub-license the Wenger Marks. It has the possibility to enter
into a distribution agreement with a third party, which it did with Holiday,
but does not have the right to sub-license the Wenger Marks to Holiday.
[66]
Travelway relies on the confidential agreement
(filed under seal) to contend that Holiday is not a licensee of Group III
(section 6.3 of the Distributor Agreement). The applicants’ statement that
Group III has granted Holiday the exclusive right to use the Wenger Marks with
Wenger’s consent within Canada is false and misleading. On the contrary, Holiday
is the distributor of the products made for or by Group III, the distribution
rights do not include rights to the trade-marks, and Holiday is therefore not an
interested party to these proceedings.
[67]
Travelway also submits that a trade-mark is that
of the manufacturer, not that of the distributor; a distributor is not a proper
party to a passing off action based on the fact that a distributor does not
share the reputation and goodwill of a trade-mark owner (Natural Waters at
paras 11-15).
[68]
Travelway portrays that the applicants submitted
only Mr. Durocher’s testimony and chose not to submit any from executives of either
Wenger or Group IIII. Travelway contends that Mr. Durocher is not qualified to
speak of the use of the other applicants’ marks in Canada, nor of the impact of
the alleged Travelway’s actions on the other applicants’ reputation and
goodwill.
[69]
In the present case, Travelway takes issue with the
fact that Mr. Durocher confirmed in his cross-examination that representatives
of Group III and Wenger are “alive and well”, and could have provided
first-hand knowledge on issues such as the alleged goodwill and reputation of
the Wenger Marks, as well as the alleged confusion. Pursuant to rule 81(2) of
the Rules, an adverse inference must be drawn from the failure of the applicants
to provide such evidence.
[70]
Under section 19 of the Act, the registration of
a trade-mark affords the person identified as its owner to exclusively use the
trade-mark across Canada. A registration affords a presumption of validity and
the person contesting the registrations bears the burden to prove that the
marks should not have been registered in the first place.
[71]
The Travelway marks were registered in 2009, without
any objection from the applicants, who objected to the use of the marks only in
late November 2012, three years after their registration.
[72]
Travelway submits that it always includes its
name on hang tags affixed to each piece of luggage, that Holiday recognized
that the majority of Travelway’s products are identified by labels, warranty
leaflets and country of origin labels as well as an indicator of the
manufacturer of the source, and that the images produced by the applicants in
their proceedings and used in their survey are misleading since the markings,
tickets, labels and warranty attached to the products are not shown in the
pictures.
[73]
As for the “Missing S” and the “Disappearing S”
logos, Travelway contends that, in September 2011 and in May 2012, it experimented
with different zipper pulls and plates, all bearing the registered Travelway
marks. For technical reasons, the “S” of the Travelway marks had to be etched
onto the cross of the enamel logo affixed to the luggage. Since the enamel logo
on the zipper pulls was too small, no “S” could be applied. As a result of a
letter received by Walmart in November 2012, Travelway modified once more the
logo button, but was still faced with the same technical constraints regarding
the zipper pulls.
[74]
In spite of these experiments, Travelway asserts
its marks were at all times used as registered; the changes constitute
inconsequential variations. “The law of trade-marks
does not require the maintaining of absolute identity of marks in order to
avoid abandonment, nor does it look to miniscule differences to catch out a
registered trade mark owner acting in good faith and in response to fashion and
other trends. It demands only such identity as maintains recognizability and
avoids confusion on the part of unaware purchasers” (Promafil Canada
Ltée v Munsingwear Inc, [1992] FCJ No 611 at p 11).
[75]
Travelway submits that the minimal changes made
for practical reasons on their zipper pulls cannot be construed as revamping
their trade-marks which would confuse the unwary consumer.
[76]
Travelway agrees with the applicants that subsection
6(5) of the Act serves as the basis for assessing confusion, for both infringement
and passing off. Travelway also agrees with the applicants that the Court must
place itself in the shoes of the average consumer, somewhat in a hurry with an
imperfect recollection of the trade-marks [Veuve Clicquot, at para 20],
but it disagrees with the applicants in that there is no confusion.
(b)
Application of the test
[77]
Travelway submits that its and Wenger’s
trade-marks are different. Although no side by side comparison of trade-marks
must be done, the overall visuals of the Wenger Marks and the Travelway marks
leave entirely different impressions, especially considering the number of other
cross logos registered and used in Canada.
[78]
Travelway submits that evidence of fame
regarding their trade-marks is absent from the applicants’ record, and that the
Canadian market is inundated with trade-marks that have the same “look and
feel” as the Wenger Marks. The distinctive character of the Wenger Marks is
diluted and the protection that may be offered to them is therefore narrow.
[79]
Travelway submits that Wenger Marks possess a
low level of distinctiveness. The indicia over which the applicants claim
exclusivity are commonly used as part of a logo or trade-mark. There exist a
number of products bearing a cross as part of a logo or trade-mark such as Tissot,
Victorinox, Swatch, Strellon; the colour red or black, or chrome, as a
background or accent colour for a logo or trade-mark is also very commonly used
as a marketing tool in the travel gear industry as is grey a common colour for
luggage lining, and there are several trade-marks registered in Canada using a
cross, the word “Swiss” or a combination of these for products related to
travel bags and accessories.
[80]
Travelway admits that the Wenger Marks have
been used in Canada for a longer period of time (since 2003 for the Wenger Marks
and since 2009 for the Travelway marks). However, the Court must also consider
the length of time during which the trade-marks also co-existed on the Canadian
market, during which there was no objection to the use of the Travelway marks,
namely the period from 2009 to 2012.
[81]
Travelway acknowledges that the nature of the
wares is the same.
[82]
Travelway acknowledges that the nature of the
trade is the same.
[83]
Travelway submits that four requirements must be
met before expert evidence is accepted in a trial: (a) relevance; (b) necessity
in assisting the trier of fact; (c) the absence of any exclusionary rule; and
(d) a properly qualified expert (Masterpiece, at para 75), and that Dr.
Corbin’s affidavit fails to fulfill these requirements. More specifically, Dr.
Corbin’s affidavit is (i) irrelevant, (ii) unnecessary and (iii) based on
second-hand information.
[84]
Travelway points out that the answers to Dr.
Corbin’s survey were vague, that the surveyed population was incomplete and
that the only criterion of selection of the interviewed sales associates was
their availability, not their knowledge in luggage. Moreover, there is no
information as to whether the surveyed sales associates were specifically
“luggage salespeople” and there is no evidence that the surveyed population is
representative of the average Canadian consumer of luggage and travel products.
An average person is not the relevant person in the assessment of confusion and
opinions of people who may never have contemplated buying these particular products
are irrelevant (McDonald’s Corp v Coffee Hut Stores Ltd, (1994) 76 FTR 281
at paras 36-37). Travelway submits that by surveying the wrong public, the
survey is irrelevant and does not meet the first prerequisite of relevance.
[85]
Travelway submits that, in assessing necessity,
judges should use their common sense in considering whether the casual consumer
would likely be confused. The judge has the ability to put himself/herself in
the position of the average person purchasing the goods and expert evidence is
unnecessary (Masterpiece, at para 92). Survey evidence should thus be
applied with caution, as it has the potential to provide empirical evidence
which demonstrates consumer reactions in the marketplace (Masterpiece,
at 93). However such empirical evidence is not provided in the Corbin affidavit
and survey; no evidence of consumer reactions was provided. This survey does
not deal with possibilities of confusion of consumers; the study is lacking
information and does not meet the prerequisite of necessity.
[86]
Travelway submits that the courts have disregarded
surveys presented as evidence in the form of affidavits sworn by representatives
of the company retained to supervise the study, and not the persons who
actually conducted the interviews (Joseph E. Seagram & Sons Ltd v Canada
(Registrar of Trade Marks (1990), 38 FTR 96 at paras 45-48). Dr. Corbin did
not interview any of the surveyed salespeople, nor did she design, conduct or
supervise the study. The survey was conducted by an external field service
company, Market Plus Inc., and was directed and analyzed by Mr. Jon Purther, another
representative of CorbinPartners Inc. No affidavit evidence of persons with either
direct or indirect knowledge of the conducted interviews was provided and
Travelway was unable to cross-examine the appropriate witnesses. Travelway
submits that considering the several vague open-ended answers given to the
questions asked in the survey, and the lack of explanations as to why some
sales associates provided the wrong information to customers, such testimony
would have been important.
[87]
Travelway submits that there is no evidence of
actual confusion between Wenger’s and Travelway’s trade-marks despite years of
concurrent use. Mr. Durocher has alleged multiple instances of confusion, but
not a single one has been documented, even after the proceedings were initiated;
hence, allegations of confusion by customers in the context of defective
product returns or advertising are mere speculations. No witness was called
upon to explain erroneous product returns or erroneous product identification
in advertisements.
[88]
Travelway believes that had such confusion
existed, it would have been shown with proper evidence. If confusion has not
occurred in all of the years of concurrent use, the Court may draw an adverse
inference as to the likelihood of confusion (Christian Dior SA v Dion
Neckwear Ltd, 2002 FCA 229 at para 19).
[89]
Travelway believes that Wenger’s and Travelway’s
marks are not identical and do not leave the same impression. Some of the notable
differences are the letter “S” in the cross (except on the zipper pulls), the
relative proportions and the overall shape of the trade-mark design.
[90]
Travelway submits that the red colour for
background and the colour white for the cross are irrelevant as Wenger has not
claimed a colour combination as a feature of its registered trade-marks. Travelway
also submits that the context of the use of the trade-mark is particularly
relevant in passing off (Mr Submarine Ltd v Amandista Investments Ltd,
1987 FCJ 1123).
(f)
Conclusion on confusion and infringement
[91]
Travelway submits that since the Wenger and the
Travelway marks are not identical, there can be no finding of infringement
under section 19 of the Act. Also, since the applicants failed to discharge
their burden of proving actual or likely confusion, there can be no finding of
infringement under section 20 of the Act.
[92]
Travelway agrees with the applicants that
passing off is prohibited by section 7 of the Act. It adds that this provision
has a timing component, in addition to the conduct and confusion component (Ciba-Geigy,
at para 33). The applicants must prove that confusion was likely at the time
Travelway commenced using their marks.
[93]
Travelway submits that the only “Swiss”
reference appearing on their products is the “Swiss Travel Products”
trade-mark, which it is entitled to use, and that the applicants do not have a
monopoly on an ambiguous reference to the Swiss origin of any product. They
themselves claim high quality in relation to their products based on Swiss
origins, when in fact, the Wenger branded products are manufactured in China. The
word “Swiss” cannot be appropriated exclusively by the applicants.
[94]
Travelway submits that the applicants have not
demonstrated the superiority of Swiss origins in the luggage industry, and that
there is no evidence that a consumer would have quality expectations in luggage
or bags based on their Swiss origins. Likewise, the applicants have not
demonstrated how the alleged misrepresentation regarding the origins of
Travelway’s goods and trade-marks would have resulted in any damages, that damages
are an essential component of a passing off claim and cannot be presumed.
[95]
Travelway submits that their valid and
enforceable trade-marks are a complete defence to passing off (Molson Canada
v Oland Breweries Ltd/Brasserie Oland Ltée, [2002] OJ No 2029 at para 2).
[96]
Travelway submits that the applicants have
presented no evidence of damages for either infringement or passing off, nor
have they even attempted to quantify them. They have not even elected between
damages or profits.
[97]
Travelway does not consent to the applicants’
request for reference under rule 153 of the Rules. It submits that a party
asking for reference must establish that it would minimize costs or that the
complexity of the case would be increased unnecessarily if the issues of
liability and damages were determined together at trial (Allstate Ins. Co.
of Canada v Grant, [2000] FCJ No 1024). There is no evidence before the
Court that reference is justified. Proof of damages is intrinsically related to
liability for infringement and passing off. Travelway believes that the applicants
are asking for a bifurcation of issues and submits that it is not available in
an application process (Canadian Supplement Trademark Ltd. v Petrillo,
2010 FC 421).
[98]
Travelway also submits that even if the Court
found their trade-marks to be invalid, damages cannot be awarded for the period
during which the registration was in effect (Remo Imports Ltd v Jaguar Cars
Ltd, 2007 FCA 258 at paras 113-114), from April/May 2009 until the date of
the final decision on the merits, which would render a reference needless.
Moreover, Travelway submits that the applicants had ample opportunity to make
their case regarding their damage and failed to do so.
[99]
Travelway submits that punitive damages are only
awarded in cases of malicious, oppressive and high-handed misconduct. They are
also awarded when compensatory damages are not sufficient to remedy the harm
suffered (Gary Gurmukh Sales Ltd v Quality Goods Imd Inc, 2014 FC 437 at
paras 123, 131, 132).
[100] The Court is satisfied that Holiday is an “interested person” as per
section 53.2 of the Act, and sides with the applicants in that it may be
affected or reasonably apprehend that it will be. The Court is satisfied that
Holiday’s role is more than that of a distributor or a sales agent, that it shares
in the reputation and goodwill, holds an interest, and is involved, and thus
meets the test set forth in the relevant case law, namely Natural Waters
at para 19 and Osiris at para 28.
(1)
Infringement and the legal test for confusion
[101] Infringement constitutes the unauthorized use of a registered
trade-mark on goods of the kind in respect of which the mark was registered.
Section 19 grants the owner of a trade-mark exclusive right to its use; it is
not in play in this case as the Travelway marks are not identical to the Wenger
Cross Logo.
[102] As stated in Hughes on Trade Marks, 2nd ed (Toronto:
LexisNexis, 2015) at p 891, the ambit of protection granted under section 19 is
expanded by section 20, when what is done by another is likely to cause
confusion, and the onus rests on the party alleging infringement to establish
confusion, hence here on the applicants.
[103] Subsection 6(2) of the Act states that confusion exists where “the use of both trade-marks in the same area would be likely
to lead to the inference that the goods or services associated with those
trade-marks are manufactured, sold, leased, hired or performed by the same
person, whether or not the goods or services are of the same general class”.
[104] Moreover, subsection 6(5) of the Act directs that, in determining
whether confusion exists, regard shall be given to “all the surrounding circumstances” including but
not limited to the five circumstances enumerated in subsection 6(5). As
emphasized by the Supreme Court, this list of circumstances is not exhaustive
and different circumstances will be given different weight in a
context-specific assessment (Veuve Clicquot, at para 21 and Mattel Inc
v 3894207 Canada Inc, 2006 SCC 22 [Mattel] at para 73).
[105] Hence, the Supreme Court has confirmed that the test for confusion, is
“a matter of first impression in the mind of a casual
consumer somewhat in a hurry who sees the [mark], at a time when he or she has
no more than an imperfect recollection of the [prior] trade-marks, and does not
pause to give the matter any detailed consideration or scrutiny, nor to examine
closely the similarities and differences between the mark” (Veuve Clicquot,
at para 20).
[106] In Mattel at para 56, Justice Binnie noted that this consumer
must be given some credit to exercise care in different circumstances, being
neither a “moron in a hurry” nor a careful and
diligent purchaser. Additionally, he or she will be the type of person likely
to purchase the wares in question (Baylor University v Governor and Co of
Adventurers Trading into Hudson's Bay (2000), 8 CPR (4th) 64 (FCA) at para
27; TLG Canada Corp v Product Source International LLC, 2014 FC 924 [TLG
Canada] at para 51).
[107] The Court’s confusion analysis must thus bear these criteria in
mind, and evaluate the surrounding circumstances from that perspective. The
applicants have insisted that the Court must avoid intellectualizing the
analysis.
(2)
Factors for confusion – Wenger’s and Travelway’s
trade-marks
[108] Case law has established that the degree of resemblance between two
trade-marks is generally the most important component of the confusion analysis
(TLG Canada, at para 58; McCallum Industries Limited v HJ Heinz
Company Australia Ltd, 2011 FC 1216 [McCallum] at para 44; Canadian
Tire Corporation v Accessoires d’autos nordiques inc, 2006 FC 1431 at para
32; Unicast SA v South Asian Broadcasting Corporation Inc, 2014 FC 295
at para 82). Hence, although it is the last of the criteria enumerated in
subsection 6(5) of the Act, it is the one examined first. If the degree of
resemblance is insufficient to cause confusion, the Court need not go any
further in its analysis.
[109] In considering the degree of resemblance, the Court must compare the
marks in their totalities, not dissect them into their constituent elements or
lay them side by side to compare and observe similarities or differences among
these elements (McCallum, at paras 33, 44; United States Polo Assn v
Polo Ralph Lauren Corp (2000), 9 CPR (4th) 51 at para 18; Café Cimo Inc
v Abruzzo Italian Imports Inc, 2014 FC 810 at para 34). It is also
important to consider each of Travelway’s marks against Wenger’s Cross Logo since
even one confusingly similar mark will invalidate Travelway’s registrations (Masterpiece,
at paras 42-48).
[110] The Court is satisfied that the two registered Travelway trade-marks,
the “S in Cross” that has no contour, and the “S in Cross on Triangle”,
although both bearing a cross, do not leave the same impression nor do they closely
resemble the Wenger Cross Logo, and that they are unlikely to create confusion.
The “S” in both marks, and the triangular shape in the “S in Cross on Triangle”
particularly act as distinguishable elements.
[111] The other two logos, used by Travelway since 2012, hence the “Disappearing
S” that minimizes the S, and the “Missing S” that eliminates the S, bear greater
resemblance to the Wenger Cross Logo as the cross becomes the dominant element
in each logo. The Court is here satisfied that the level of resemblance is
sufficient to warrant further analysis, and will thus pursue the confusion
analysis with regards to the two non-registered Travelway trade-marks.
[112] Where a mark refers to many things or is only descriptive of goods
or their geographic region, it will not be considered inherently distinctive
and will be given less protection (TLG Canada, at paras 59-60). However,
distinctiveness is not only inherent, it can also be acquired through continual
use in the marketplace, and as Justice Beaudry stated “to
establish that distinctiveness has been acquired, it must be shown that the
mark has become known to consumers as originating from one particular source”
(Tommy Hilfiger Licensing Inc v Produits de Qualité IMD Inc, 2005 FC 10
at para 53).
[113] The applicants have understandably not submitted that the Wenger
Cross Logo held inherent distinctiveness. It consists of a white cross on a red
or black background; it is based on the Swiss flag, and is neither original,
nor unique or inventive.
[114] The Court sides with the respondent in that the applicants have not
demonstrated that the Wenger Cross Logo acquired distinctiveness through its
use in the luggage and bag market since 2003.
[115] The Court considered the fact that millions of Wenger Luggage Wares
have been sold since 2003 and that Holiday has invested considerably in the
marketing and promotion of its wares, namely through print media placements.
However, it cannot conclude as the applicants contend, that the Cross Logo is
known to consumers as a unique identifier of luggage and bags emanating from
Wenger and continuing the celebrated tradition of the Swiss Army Knife. The
Court concludes otherwise, as there exist third parties using a similar trade-mark,
a white cross, not the least of which is Victorinox, who also holds a tradition
linked to a Swiss Army Knife. There is no evidence that consumers identify the
Wenger Cross Logo uniquely and distinctively as Wenger’s.
[116] The Court must thus conclude that consumers are not likely to know
the Wenger Cross Logo as originating from one source, i.e. Wenger.
[117] Length of time not only contributes to showing the acquisition of
distinctiveness, discussed above, but as Justice Pinard points out in McCallum,
at para 41 “the longer trade-marks have co-existed
without actual confusion, the harder it will be for the applicant to prove
a likelihood of confusion”. The non-registered trade-marks have
co-existed since 2012 and, as I will point out below, evidence of actual
confusion is quite scarce.
[118] The parties agree that the nature of their wares is the same.
[119] The parties agree that the nature of their trade is the same.
(f)
Other surrounding circumstances
[120] The Court is compelled to point out, when examining surrounding
circumstances, that the “Missing S” logo has been used by Travelway exclusively
on zipper pulls. Zipper pulls are quite small on luggage and bag wares, and it thus
appears unlikely that the average consumer somewhat in a hurry would, in any
case, be confused as to the origins of the wares by a logo, distinct of the
other ones used on said wares, affixed to the zipper pulls. It appears unlikely
that the average consumer somewhat in a hurry would even notice this type of
detail.
(3)
Evidence of likelihood of confusion
[121] The applicants tendered the affidavit of Dr. Corbin and the results
of a mystery shopping survey as evidence of likelihood of confusion. The test
for the admissibility of expert evidence was developed in R v Mohan,
1994 2 SCR 9 at paras 17-28. The Supreme Court stated that for an expert
evidence to be admissible it has to be (i) relevant, (ii) necessary in
assisting the trier of fact, (iii) absent of any exclusionary rule, and (iv) a
properly qualified expert. This test was applied in the context of a survey
evidence for trade-marks in Masterpiece, at para 75.
[122] In the present case, Travelway doubts the relevance and the
necessity of the survey evidence, as well as the form in which this evidence is
introduced, namely a sworn affidavit by Dr. Corbin who neither conducted the
interviews nor designed the survey. The Court sides with the respondent and
gives no weight to this survey.
[123] The applicants asserted that actual confusion has been established
by way of mistakes made in retail advertising, by anecdotal evidence of various
instances of actual confusion and by Travelway having mistakenly received
customer returns of Wenger Luggage Wares.
[124] As for retail advertising, Canadian Tire and Walmart made mistakes
in three of their printed flyers, and the evidence of actual confusion lies in
the assertion that these flyers are a potential source of “transmitted
confusion” because they risk confusing as many consumers as they reach
(applicants memorandum, at para 49, referring to Mr. Durocher’s and Dr.
Corbin’s affidavits). The Court is satisfied that this does not amount to
evidence of “actual” confusion by the consumers.
[125] The other two allegations of actual confusion are indeed anecdotal,
have not been recorded and have not been submitted by the person who actually witnessed
the alleged confusion, and the Court consequently gives them no weight.
[126] With regards to the above reasons, the Court is satisfied that, from
the perspective of the average consumer somewhat in a hurry, the Travelway marks
as used on its luggage and bags wares are not likely to confuse the consumer and
to lead him to conclude that those luggage and bags are manufactured or sold by
the same entity as the Wenger luggage and bags.
C.
Has Travelway passed off its wares for those of
Wenger’s in contravention of section 7 of the Act?
[127] The Supreme Court of Canada restated in Kirkbi AG v Ritvik
Holdings Inc, [2005] 3 S.C.R. 302 at para 66 the test for passing off:
66 Our
Court appears to have adopted the tripartite classification in Ciba‑Geigy.
In that case, our Court allowed a passing-off action in respect of the get‑up
of a prescription drug. Gonthier J. reviewed some of the earlier jurisprudence
and stated that claimants had to establish three elements in order to succeed
in a passing-off action:
The three necessary components of a
passing-off action are thus: the existence of goodwill, deception of the public
due to a misrepresentation and actual or potential damage to the plaintiff. [p.
132]
[128]
The Supreme Court of Canada outlined, in Kirkbi,
at para 67, that the “claimant
must establish goodwill in respect of the distinctiveness of the product
(Ciba-Geigy, at 132-33; Oxford Pendaflex Canada Ltd v Korr Marketing Ltd, [1982]
1 SCR 494, at 504 and 507, per Estey J.)”.
[129] The applicants assert that the Wenger Cross Luggage Marks hold an
embedded trust, a cachet that allows their owners to add a price premium and to
generate a higher level of sales from a given marketing investment than
lesser-known brands would generate, as demonstrated mainly by their sales
volume, by the fact that they have been used since 2003, and by the significant
royalty Group III and Holiday are willing to pay for their use (at para 90
of their memorandum). The goodwill attached to the Wenger Cross Luggage Wares
is allegedly amplified by its association with the Swiss Army Knife legacy.
[130] However, in my view, the interference by third party, namely
Victorinox, does dilute the Wenger Cross Luggage Marks’ goodwill. The Cross
Logo, and possible goodwill attached to it, is not solely Wenger’s, and the
applicants have tendered no evidence to support another conclusion. Furthermore,
there is no evidence that the Wenger Cross Luggage Marks are sold at a premium
compared to other luggage and bags. Were they to be sold at a premium, there is
no evidence regarding the justification for such a premium, as the volume of
sales by itself appears insufficient to confirm the level of goodwill absent
some confirmation of the causal link between the sales and said goodwill.
[131] In Kirkbi, at para 68, the Supreme Court outlined that “The second component is misrepresentation creating confusion
in the public. Misrepresentation may be wilful and may thus mean the same thing
as deceit but now the doctrine of passing off also covers negligent or careless
misrepresentation by the trader” (Ciba-Geigy, at 133; Consumers
Distributing Co v Seiko Time Canada Ltd, [1984] 1 S.C.R. 583 at 601, per Estey J.).
The applicants assert that misrepresentation on the part of Travelway rests on
its false claims of “Swissness”, and on its use of the “Disappearing” and of
the “Missing” S logos.
[132] The Court is again satisfied that the average consumer somewhat in a
hurry would not likely be confused as to source, said average consumer would
not conclude that the Travelway wares originate from the Wenger’s source. This
conclusion is borne by the observation that the “Missing S” logo is affixed on
zipper pulls and is possibly not even visible to the average consumer in a
hurry, and that at least one third party logo interferes in the consumer’s
mind, that of Victorinox.
[133] The applicants have submitted no evidence of actual damage but
alleged having suffered or being likely to suffer damage as the result of the
respondents’ actions. As the Court is satisfied that the first two criteria have
not been met by the applicants, it concludes there is no likelihood of damage.
[134] Travelway’s marks are registered and valid. The onus lay on the applicants
to prove that the marks should be expunged, and the applicants here have not
met this burden.
[135] The Court having concluded that Travelway did not infringe on the
Wenger Cross Logo or passed off its wares for those of the applicants, there is
no need for relief.
[136] For the reasons mentioned above, this application is dismissed.
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